The New York Times’ David Johnston reports that Kyle D. Foggo, executive director of the CIA from 2004-06, pleaded guilty yesterday to arranging government contracts for his friend Brent R. Wilkes. This is not the first time that Wilkes, a San Diego contractor, has made the beltway police blotter. He also bribed California Rep. Randy "Duke" Cunninghman, formerly a powerful Congressional appropriator, now an inmate seeking a pardon from the Bush administration.

Wilkes himself was sentenced to 12 years in prison for the Cunningham bribery. As for former CIA no. #3 Foggo, he faces 20 years in prison for participating another Bush administration contracting imbroglio now unraveling.-MB

The New York Times Eric Lichtblau and Sharon Otterman report that Attorney General Michael Mukasey named a special prosecutor to investigate criminal wrongdoing in the 2006 Justice Dept. dismissal of nine U.S. Attorneys. The prosecutor, a U.S. Attorney herself- Nora Dannehy of Connecticut, will specifically look at whether former AG Alberto Gonzales committed crimes like firing attorneys for improper reasons and lying under oath to Congress.

The appt. of a special prosecutor comes after an epic, 356-page Justice Dept. Inspector General/Office of Personal Responsibility report that details the entire process that lead to the attorneys dismissal, focusing a "chapter" on each fired attorney. The IG/OPR investigators lacked subpoena power, though, to summon witnesses like Karl Rove and Harriet Miers. Perhaps the special prosecutor will connect all the dots– or not.-MB

Yesterday’s gigantic news of the bailout bill’s failure was more about the House of Representatives than federal agencies– many lawmakers are more ideological than their party leaders and still others are in vulnerable seats and closely listening to constituents pan the bailout. Nonetheless, Treasury Sec. Henry Paulson and Federal Reserve Chairman Ben Bernanke are wondering what they did wrong to sell the bailout and what to do next.

The Washington Post’s David Cho and Neil Irwin write that the Treasury and Fed are keeping their fingers crossed that the House will re-vote for the plan. In defense of Bernanke and Paulson, they were already spending billions on taxpayer money bailing out individual companies and sought a more democratic process of approval for a mega-bailout. Now it might be a return to their earlier strategy.

Paulson has perhaps not slept for the past 10 days. That said, he or Bernanke or somebody at the White House needed to have done a better job explaining why a bailout is necessary for low-and-medium-income people. The story this morning is the politics and culture of the House, but its also about Paulson’s hurry-hurry strategy backfiring badly.-MB

Understanding Government has released an in-depth report on the Consumer Product Safety Commission, which is at a crossroads following congressional reauthorization last summer.  CPSC is scheduled to receive an additional $60 million in budget funds in the next eight years and increase its staff to 500.  But as the report describes, CPSC must overcome decades of neglect at the hands of Congress and the White House — just as America continues to cope with a tidal wave of imported products from China and around the world.   The report, authored by Matthew Blake, comments on new initiatives such as U.S. port inspections, recalls, the consumer database of product complaints, and the expanded use of 3rd-party testing labs.   It also provides a historical overview of the CPSC from its founding in the pro-consumer activist 1970’s through to its challenges during the presidency of George W. Bush.  Click here for the full report.

We look forward to your comments and inquiries and will continue to monitor CPSC performance.

Ned Hodgman

The much anticipated report on fired U.S. Attorney’s from Justice Dept. Inspector General Glenn Fine will be released today, after an 18-month investigation. But the Washington Post’s Carrie Johnson reports that the findings will not lead to a grand jury referral for former Attorney General Alberto Gonzales. The report will, however, likely result in current AG, Michael Mukasey, appointing a special prosecutor to further investigate the politically-tainted firing of nine U.S. Attorneys in December 2006.

Fine is a good IG and he’s worked on this blockbuster probe with the Office of Professional Responsibility to deliver a report sure to bring context. But the investigation has been hurt by the lack of legal authority to talk with people outside the Justice Dept. That’s a big, big problem when the question on many people’s minds is whether Karl Rove and other White House officials were involved in the dismissals.-MB

The New York Times’ Floyd Norris reports that if the current bailout proposal passes Congress, Treasury Sec. Henry Paulson can spend his $700 billion on either mortgages or mortgage-backed security or any financial instrument that isn’t a mortgage or mortage-backed security. In other words, he can spend it on anything! Norris writes: "Rarely if ever has one man had such broad authority to spend government money as he sees fit, with no rules requiring him to seek out the lowest possible price for assets being purchased."

The bill does require Paulson "to do what he can to maximize the profit and minimize the eventual loss to the federal government." That’s sure a relief that the bill suggests Paulson spend the money wisely!

Snark aside, Norris’s article is really good at making the point that when Paulson gave Congress his plan a week ago, lawmakers balked and held hearings excoriating the Treasury Secretary. But instead of curtailing Paulson’s powers in a meaningful way, they’ve added layers of oversight to monitor Paulson’s activities. Special oversight is helping in illuminating a situation, as evidenced by Stuart Bowen, the ace special inspector general for Iraq. But it can also have almost zero impact on policy changes, as evidenced, again, by Bowen.

Paulson, of course, probably has only three months left in office, unless the next president re-appoints him. If the bill passes as is, the $700 billion will be spent by Dec. 31, 2009. Will he try to spend it all at once?-MB

The Washington Post’s Paul Kane and Lori Montgomery report that Treasury Sec. Henry Paulson successfully persuaded Congressional leaders this weekend to support a $700 billion bailout for Wall Street. The House will vote today on a bill whose central premise hasn’t changed from Paulson’s proposal a week ago: an incomprehensible sum of money to buy bad mortgage-backed assets from Wall Street firms.

Democrats came around to the plan after concessions by Paulson to create a bunch of new oversight offices within the bureaucracy, including an inspector general just to monitor the bailout. There will also be a new "office of financial stability" created if the plan goes through. And, perhaps most importantly, if the government hasn’t recovered the $700 billion from Wall Street firms by 2014, the 2014 presidential administration must draft a plan to make Wall Street return the money.

The Post quotes House Speaker Nancy Pelosi as saying the bailout language is a done deal. There is still likely to be some resistance from the lower chamber, particularly from rank-and-file Republicans, some who have equated the plan with socialism. But expect the bailout bill to become bailout law in the week.-MB

Part of our initiative on federal, state, and local executive branch performance in cities and towns across the U.S.  Contributed by Jane Johnston of the Newburgh Advocate.

Newburgh Ministry receives HHAC grant

Newburgh, NY — September 25, 2008 — Newburgh Ministry, a community center/hospitality house, has received a $1.8 million grant from the Homeless Housing Assistance Corporation, an agency of the state of New York.  The grant will be used for capital improvement, rehabilitating their building at and making it ADA compliant.

In 2005, Newburgh Ministry began operating an all night drop-in shelter, but without cots or beds.  Guests have had to sleep on chairs or the floor.  The HHAC grant will provide 19 beds for men and women. (more…)

The paper’s this morning gave a gloomy forecast on Congress and the Bush administration agreeing to a Wall Street bailout. But now the stories are being tweaked to reflect more confidence in a compromise.

The Wall Street Journal’s Greg Hitt, Damian Paletta, and Deborah Solomon report that Senate Majority Leader Harry Reid says that Congress will work through the weekend and hash out a $700 bailout plan by Monday.

As has been well chronicled, the compromise between Treasury Sec. Henry Paulson and Congress seemed to be going relatively okay until yesterday when House Minority Leader John Boehner lead a  Congressional Republican rebellion. Boehner, and according to the Journal about 80 percent of his House GOP colleagues, want a more market-based bailout where banks will provide insurance for company’s distressed assets.

The talks were further complicated by GOP presidential nominee John McCain’s arrival into Washington. The Arizona Republican didn’t really endorse Boehner’s plan or Paulson’s vision or that of the House Democrats. In fact, it’s not clear what he did besides announce his presence. Sen. Robert Bennett, a Utah Republican who has been fairly pro-Paulson throughout the week, gave a revealing "no comment" about whether McCain was helping or hurting negotiations.

Perhaps the confidence expressed today by Reid– and also Chris Dodd, the Senate banking committee chairman– show that the Democrats think they can pass a plan to their liking. This would include giving bankruptcy judges the authority to adjust mortgage terms and limiting the compensation packages of CEOs.

I wonder, though, what the Democrats can really get. Could Senate Republicans heed House Republican opposition and filibuster a bailout? Stay tuned.-MB

Hurricane Ike was, thankfully, not as devastating to southeast Texas as originally feared. But, as the New York Times’ Kate Murphy reports, one consequence is that 25,000 cows were displaced from their homes.

Now the Texas Dept. of Agriculture is teaming with the non-governmental Independent Cattle Association to round-up the 15,000 cows still at large. The loose cows are, of course, devastating to the ranchers that own them. But the danger they present to motorists has also forced the state of Texas to close off roads. Federal agencies have yet to fully wade into the lingering problem, though the Natural Resources Conservation Service is starting to dispose of the thousands of cattle carcasses.

I find this loose cows problem to be quite interesting. The article leaves unanswered, though, if federal and state govt. officials anticipated the problem.-MB